Transcript

1.
DECEMBER 2013 | 10 EMEA PREDICTIONS FOR 2014
RESEARCH & FORECASTING EMEA
10 EMEA PREDICTIONS FOR 2014
TOTAL CROSS BORDER INVESTMENT, ALL SECTORS
4,000
year to date 2013
3,500
2012
+126%
+267%
3,000
mln eur
2,500
2,000
1,500
Source: RCA
Spain
Ireland
Italy
ANNUAL CHANGE IN COMMERCIAL PROPERTY
INVESTMENT, Q1-Q3 2013 VS. Q1-Q3 2012
60%
51%
50%
54%
30%
20%
9%
0%
-10%
-20%
-30%
France
E-commerce to continue transforming logistics and retail sectors
Ireland
-24%
Paris
If 2013 was the “Year of Transition” with banks restructuring and selling off ‘servicing platforms’
and ‘non-performing loans’ to foreign private equity and special situation funds, then 2014 is
likely to be the ‘Year of Consolidation and Stabilisation’ with cross border opportunistic investors
exploiting a widening yield gap between prime and secondary. Occupier markets will remain
weak as lack of finance and business uncertainty means that business will remain cautious.
High unemployment may pressure government and cause slippage in EU deficit targets.
The French economy will improve from H2 14 onwards, but French unemployment will remain
high and public debt issues will undermine the government’s strength to effect further reforms
in France and influence wider Eurozone reform initiatives. The gloss on Paris’ pre-eminence as
an international safe haven will remain somewhat dulled, although cross border opportunistic
funds will continue to exploit perceived weaknesses as leasing markets move beyond the 2013
cyclical trough. E-commerce will continue to transform the logistics and retail sectors.
40%
10%
Cross border capital flows from Asian and MENA countries will continue to find their way into
core European markets pressuring yields and putting upward pressure on capital values. Lack
of institutional grade stock and keen competition in core markets will drive renewed investment
and development activity in peripheral markets and second tier European cities EMEA wide, but
especially in the German ‘Alternative Twenty’, the Polish ‘Big Six’, Spain and Ireland. Pension
funds and insurers are set to take on a much greater volume of real estate loans and debt
placements as bank balance sheets continue to shrink.
Cross border opportunistic investors to exploit widening yield gap
500
0
Cross border capital flows to peripheral markets and second tier cities
Spain
+98%
1,000
Europe
International businesses will continue to be attracted by comparative costs
London
Munich Frankfurt
Source: RCA
DUBLIN: OFFICE RENTS HAVE BOTTOMED OUT
AND CONSTRUCTION HAS DRIED UP
H1 2009
H2 2009
H1 2010
H2 2010
H1 2011
H2 2011
H1 2012
H2 2012
H1 2013
eur/sqm/month
sqm under construction (Right axis)
Average rents CBD (Left axis)
40.0
90,000
80,000
35.0
70,000
30.0
60,000
25.0
50,000 s
q
20.0
40,000 m
15.0
30,000
10.0
20,000
5.0
10,000
0.0
0
Source: Colliers International
www.colliers.com/uk
Ireland is the first Eurozone country to exit the bailout system. The Irish economy will continue
to improve with an export led recovery. Recovery in the Central Dublin residential and commercial
property markets will continue, with international businesses continuing to be attracted by low
corporate taxation rates and competitive labour costs. Prime retail pitches will continue to see
international brands competing for space. Recovery ex-Dublin, will be much slower and
protracted.
Nordics
Intense competition for ‘safe haven’ assets will force investors to be creative
Economic activity will accelerate across Scandinavia, with only oil-driven Norwegian economy
set to slow as signs of the “Dutch disease” take their toll. A revived economy will benefit the
leasing markets with more rental growth to come in Helsinki and Stockholm in the next 12
months and further upward pressure on values. The region will continue to appeal to foreign
investors due to its safe haven status, but intense local competition will force some of the capital
to be more creative in acquisitions, both in terms of sector and geographies, as highlighted by
Starwood Capital’s recent purchase of retail assets in Sweden.

2.
DECEMBER 2013 | 10 EMEA PREDICTIONS FOR 2014
480+ offices in
62 countries on
6 continents
United States: 140
Canada: 42
Latin America: 20
Asia Pacific: 195
EMEA: 85
LONDON
50 George Street
London W1U 7GA
+44 20 7935 4499
RESEARCH AND FORECASTING
Mark Charlton
+44 20 7487 1720
mark.charlton@colliers.com
Walter Boettcher
+44 20 7344 6581
walter.boettcher@colliers.com
Bruno Berretta
+44 20 7344 6938
bruno.berretta@colliers.com
UK
Increased business confidence will support improvement in occupier markets
UK consumer confidence and economic recovery will strengthen in 2014 with real GDP likely to
rise by 2.5% as the government continues to stimulate the economy through policies aimed at
supporting house prices and increasing household spending in the run-up to the 2015 election.
Increased business confidence will lead to rental growth UK wide as occupier markets strengthen
and business expansion gains traction. UK base rates will not rise until 2016.
UK regional markets and secondary assets are increasingly in focus
Property investment transactions will grow beyond the £40bn recorded by year-end 2013, but will
fall short of the 2006 peak level of £58bn. In the absence of quality supply and keen competition
from international cash buyers, domestic investors will look beyond core markets and assets to
regional and secondary assets requiring capital expenditure and redevelopment into institutional
grade product. This demand will result in lower yields in London and moderate yield compression
across secondary asset classes.
Central and Eastern Europe
Opportunistic investors will turn attention to South East Europe as political tensions ease
Negative political perception, heightened by recent political tensions in Ukraine, will dissipate in
2014, with non-core markets – primarily Romania, but also Hungary and Bulgaria - expected to see
renewed investment activity and interest in 2014. We may even see increased investment activity
in the more emerging investment market of Serbia, which has undertaken significant political and
economic reforms in preparation for EU accession, supporting the appeal of the country to various
forms of Foreign Direct Investment (FDI). Greece also looks to have turned a significant corner and
should see renewed levels of investment activity driven by opportunity-led investors.
Africa
South Africa remains a preferred destination, but other countries are now on the radar
Increased political stability in some countries, infrastructure investment, continuing urbanization
and healthy economic growth rates will create new opportunities across Africa for corporates
looking to new markets to both improve margins and revenues. The active companies will largely
come from the Oil & Gas, Telecoms , FMCG and Banking sectors. While South Africa will remain
the preferred destination for many established players and new entrants, other countries will be
increasingly on the radar, particularly Angola, Namibia, Botswana, Uganda, Ghana, Kenya and
Nigeria.
AFRICA RISING STARS AT A GLANCE
Ease of doing business;
SSA ranking 2013, out of 47
total population
(mln)
5
29%
6.1
25
Nigeria
20
24%
7.4
165
South Africa
3
100%
2.9
51
Kenya
Colliers International is the licensed trading name of Colliers
International Property Advisers UK LLP which is a limited
liability partnership registered in England and Wales with
registered number OC385143. Our registered office is at
50 George Street, London W1U 7GA
GDP growth
forecast 2014
Ghana
Disclaimer: This report gives information based primarily on
published data which may be helpful in anticipating trends in
the property sector. However, no warranty is given as to the
accuracy of, and no liability for negligence is accepted in
relation to the forecasts, figures or conclusions contained in it
and they must not be relied on for investment purposes. This
report does not constitute and must not be treated as
investment advice or an offer to buy or sell property.
December 2013
13269
% of South Africa
GDP/capita 2012
12
16%
6.2
42
Uganda
13
13%
6.5
36
Botswana
4
139%
4.1
2
Namibia
8
69%
4.0
2
Angola
40
54%
6.3
20
Top performer
Sub-Saharan
Africa
Rwanda
Equatorial Guinea
($26,486 ; 2.3
times South Africa)
Sierra Leone
(14%) - bar
South Sudan
Nigeria
Source: IMF WEO, World Bank
Middle East
Large-scale infrastructural investment will continue across the GCC
Accelerating success.
www.colliers.com/uk
Despite continued political instability in specific areas and global petroleum supply/demand
uncertainties, the Middle East economies will continue to see steady non-oil growth. Unemployment
though will remain high and provide scope for further political turbulence. A gradual normalisation
nonetheless is expected in Egypt through the year. 2014 will also be the year of continuing
significant infrastructure expenditure across the GCC region in social infrastructure (housing,
hospitals and schools) and primary economic infrastructure (roads and rail). Completion of large
scale mixed use development projects particularly will contribute to on-going urbanisation in the
region.